The Morning Call
9/23/20
The
Market
Technical
The Averages (27288, 3315) recovered a part of Monday’s
losses, though volume was down, breadth improved only slightly, the VIX continues
to show signs of elevated investor uncertainty and both remain in very short
term downtrends. I continue to believe
that the long term bias is to the upside and will remain so until
QEInfinity/Forever ceases or is discredited.
Meanwhile, support exists at the indices’ 100 DMA’s (26208/3159), their
200 DMA’s (26208/3097) and the lower boundary of their short term trading
ranges (18213/2991).
Gold fell again, finishing
below the July/August minor support level.
Barring a quick reversal, this is a negative for gold. TLT was also down, ending back below its 100
DMA (now resistance) and the trend of lower highs. The dollar was up another
3/8%, closing near the upper boundary of its short term downtrend and setting a
new higher low and higher high. So, each
of these indices is challenging boundaries of recent consolidation ranges,
appears to be breaking out which, if successful suggests a stronger economy/higher
interest rates.
Tuesday in the
charts.
https://www.zerohedge.com/markets/stocks-silver-dollar-bonds-oil-rally-vix-election-hump-worsens
Fundamental
Headlines
The
Economy
US
Month to date retail
chain store sales improved significantly from the prior week.
Weekly mortgage
applications were up 6.8% with purchase applications up 3.4%.
July existing home
sales were up 2.4%, in line.
https://www.calculatedriskblog.com/2020/09/nar-existing-home-sales-increased-to.html
The September Richmond
Fed manufacturing index came in at 21 versus estimates of 10.
International
The September Japanese
flash manufacturing PMI came in at 47.3 versus consensus of 48.0; the services PMI
was 45.6 versus 47; the composite PMI was 45.5 versus 48.0.
The September German
flash manufacturing PMI came in at 56.6 versus expectations of 56,5; the services
PMI was 49.1 versus 53; the composite PMI was 53.7 versus 54.1.
The September EU
flash manufacturing PMI came in at 53.7 versus forecasts of 51.9; the services PMI
was 47.5 versus 50.8; the composite PMI was 50.1 versus 51.7.
The September UK
flash manufacturing PMI came in at 54.3 versus projections of 54.1; the services
PMI was 55.1 versus 56; the composite PMI was 55.7 versus 56.3.
October German
consumer confidence was reported at -1.6 versus predictions of -1.0.
Other
Is the US economic recovering fading?
http://www.capitalspectator.com/is-the-us-economic-recovery-fading/
Two thirds of the
hotel properties in the US say that they will not last another six months at
current occupancy rates.
Fiscal
Policy
The CBO just released
its latest projections for US government debt growth. You know that mounting government debt is one
of the pillars of my forecast of a declining long term secular economic growth rate. At the risk of being repetitious, the primary
reason is ‘crowding out’; that is the government sucks so much money out of the
private economy to service its debt that there is less investment capital available
to fund economic growth. And since
government expenditures do little to enhance productivity, inflation increasingly
becomes a problem.
The
coronavirus
September US coronavirus stats.
https://www.calculatedriskblog.com/2020/09/september-21-covid-19-test-results.html
Experts worry about the rush for results.
Bottom
line
Does the Market realize no help is coming?
https://www.zerohedge.com/markets/did-market-just-realize-no-help-coming
The easiest thing in investing.
https://theirrelevantinvestor.com/2020/09/21/the-easiest-thing-in-investing/
Intangible capital and the value factor.
News on Stocks in Our Portfolios
Mastercard (NYSE:MA) declares $0.40/share quarterly dividend, in line with
previous.
Nike (NYSE:NKE): FQ1
GAAP EPS of $0.95 beats by $0.47.
Revenue
of $10.6B (-0.6% Y/Y) beats by $1.45B.
General
Mills (NYSE:GIS):
FQ1 Non-GAAP EPS of $1.00 beats by $0.13; GAAP EPS of $1.03 beats
by $0.15.
Revenue
of $4.36B (+9.0% Y/Y) beats by $150M.
General Mills (NYSE:GIS) declares $0.51/share quarterly dividend, 4.1% increase from
prior dividend of $0.49.
What
I am reading today
A
ray of hope in college discourse.
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